Ifly 2024 Franchise FAQ - FDD Ninja

Question 1

What happens if an Ifly franchisee violates the quality and safety standards for Products and Services?

Accepted Answer

Franchisor's authorized representatives shall have the right to enter upon the Location without notice during business hours, without disrupting Franchisee's business operations, to examine Franchisee's operations, confer with Franchisee's employees and inspect the premises, building and Equipment to determine whether the business is being conducted in accordance with this Agreement, the System and the Manuals.

If any such inspection indicates any deficiency or unsatisfactory condition with respect to any matter required under this Agreement, the System, or the Manuals, including quality, cleanliness, service, health and authorized Products and Services, Franchisor will notify Franchisee in writing of Franchisee's non-compliance and Franchisee shall immediately correct or repair such deficiency or unsatisfactory condition.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 2

What are the acceptable methods for delivering notices under the Ifly agreement?

Accepted Answer

Any and all notices required or permitted under this Agreement shall either be in writing, personally delivered or mailed by expedited delivery service or certified or registered mail, return receipt requested, first-class postage prepaid, or a scan of a signed document transmitted by electronic mail return receipt requested to the respective parties at the following addresses unless and until a different address has been designated by written notice to the other party:

Source: Item 23 — Receipts (FDD pages 57–174)

Question 3

According to the Emphasis of Matter section, what is the relationship between Ifly's financial statements and its operation as an unaffiliated company of iFLY Holdings, LLC?

Accepted Answer

As discussed in Note 2 to the accompanying financial statements, the financial statements have been prepared from the separate records maintained by the Company and may not be indicative of the conditions that would have existed if the Company had been operated as an unaffiliated Company of iFLY Holdings, LLC. Our opinion is not modified with respect to this matter.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 4

What is the address of Deloitte & Touche LLP, the independent auditor for Ifly Franchising, LLC?

Accepted Answer

**Deloitte [& Touche LLP](https://franchimp.com)** 500 West Second Street

Suite 1600 Austin, TX 78701-4671

USA

Tel: +1 512 691 2330 www.deloitte.com

Source: Item 23 — Receipts (FDD pages 57–174)

Question 5

Does the Ifly buyer remain liable after assignment if the assignee defaults?

Accepted Answer

- 6.3.1 This Agreement shall not be assignable by Buyer without the express written consent of Seller, which consent shall not be unreasonably withheld or delayed, so long as the prospective assignee executes a then current iFLY franchise agreement containing substantially the same terms as the Franchise Agreement. Seller may withhold its consent, and in so doing will not be deemed to be acting unreasonably, if Seller in the exercise of its reasonable business judgment determines that the prospective assignee has insufficient business reputation or experience, or that the financial condition of the prospective assignee is inadequate to fulfill the obligations of the franchise agreement (notwithstanding that Buyer may remain liable). It is understood and agreed that the express written consent of Seller shall be required before assignment to an Affiliate of Buyer or a successor of Buyer of all or substantially all of the relevant (to this Agreement) assets of Buyer. In the event that this Section 6.3.1 is determined to be unenforceable, Buyer agrees to take such actions as Seller may require to protect Seller's interests, including, without limitation, offering Seller a right of first refusal to purchase the Equipment and/or prior to any sale to a third party, removing all trademarks and other indicia identifying the Equipment with Seller or its Affiliates.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 6

What constitutes unreasonable withholding of consent by Ifly regarding assignment?

Accepted Answer

This Agreement shall not be assignable by Buyer without the express written consent of Seller, which consent shall not be unreasonably withheld or delayed, so long as the prospective assignee executes a then current iFLY franchise agreement containing substantially the same terms as the Franchise Agreement. Seller may withhold its consent, and in so doing will not be deemed to be acting unreasonably, if Seller in the exercise of its reasonable business judgment determines that the prospective assignee has insufficient business reputation or experience, or that the financial condition of the prospective assignee is inadequate to fulfill the obligations of the franchise agreement (notwithstanding that Buyer may remain liable). It is understood and agreed that the express written consent of Seller shall be required before assignment to an Affiliate of Buyer or a successor of Buyer of all or substantially all of the relevant (to this Agreement) assets of Buyer. In the event that this Section 6.3.1 is determined to be unenforceable, Buyer agrees to take such actions as Seller may require to protect Seller's interests, including, without limitation, offering Seller a right of first refusal to purchase the Equipment and/or prior to any sale to a third party, removing all trademarks and other indicia identifying the Equipment with Seller or its Affiliates.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 7

Does the Emphasis of Matter section modify the auditor's opinion regarding Ifly's financial statements?

Accepted Answer

As discussed in Note 2 to the accompanying financial statements, the financial statements have been prepared from the separate records maintained by the Company and may not be indicative of the conditions that would have existed if the Company had been operated as an unaffiliated Company of iFLY Holdings, LLC. Our opinion is not modified with respect to this matter.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 8

What factors can cause hourly wages to vary for an Ifly business?

Accepted Answer

(3) "Selling, General, and Administrative" (SG&A) includes management salaries and hourly wages for flight instructors and other tunnel staff, commissions, bonuses, payroll tax, health insurance, and payroll fees. Also contained within SG&A are the costs for travel, uniforms, and customer flight gear. The amount of hourly labor necessary to operate an iFLY Business will vary but should scale consistently with the sales volume of the tunnel. Hourly wages may vary significantly by geographic location, the supply of and demand on the local labor pool, and state and federally mandated minimum wage laws.

Source: Item 19 — Financial Performance Representations (FDD pages 48–52)

Question 9

Does the Ifly franchise agreement specify what happens after the agreement term regarding contesting IP rights?

Accepted Answer

- 8.2. No Contest of IP Rights. Neither Franchisee nor any Owner shall take any action that would prejudice or interfere with the rights of Franchisor or its Affiliates in and to the IP. Franchisee and its Owners agree that they will not, during the Term of this Agreement or thereafter, contest or assist others to contest the validity of the IP or otherwise attack the rights of Franchisor or its Affiliates in and to the IP. Franchisee agrees that, should it or its Owners contest or assist others in contesting the validity of the IP during the Term of this Agreement, Franchisor shall have the right, immediately upon written notice to Franchisee and at its sole discretion, to terminate this Agreement or exercise any additional remedies set forth herein or available at law or in equity. If a final determination is made by a court of competent jurisdiction that any of the contested IP is in fact valid, Franchisee agrees that it will pay all actual costs and disbursements incurred by Franchisor in contesting Franchisee's position regarding said IP.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 10

Can an Ifly franchisee permit the Equipment to be used for purposes other than its intended design?

Accepted Answer

- 7.3. Minimum Safety Standards. Use of the Equipment shall remain under the Franchisee's exclusive direction and control. Franchisee shall not permit the Equipment to be used for any purpose other than that for which it was designed, nor allow it to be neglected or abused. Franchisee shall not make any alterations or additions to the Equipment without Franchisor's prior written consent. Franchisee will be responsible for assuring the careful and proper training in and use of the Equipment including, but not limited to, adherence to all of the training requirements and safety standards published by Franchisor and the supervision by Franchisee's properly trained personnel. Such safety standards represent only the minimum standards and Franchisee shall be responsible for monitoring and implementing any additional or more stringent safety standards that may be required at the Location. Franchisee shall provide such access controls, placards, lock-outs and cautions as may be required or advisable to insure the safe use and operation of the Equipment.
- 7.4. Suspension of Operations for Safety Reasons. Franchisee shall immediately cease all use of the Equipment in the event that Franchisee, its agents or employees, become aware of any material defect in the Equipment or material condition requiring repair, adjustment or replacement or any other condition which, in Franchisor's judgment, is likely to pose a significant risk to public health or safety. In addition to Franchisor's other rights and remedies hereunder, if Franchisor notifies Franchisee of its reasonable belief that the operation of the Equipment in its then current state poses a significant risk to public health and safety, then immediately upon receipt of written notice from Franchisor, Franchisee shall temporarily close the Location and cease operation of upon receipt of written notice from Franchisor and shall not re-open the Location or permit members of the public to use the Equipment until the situation has been resolved and Franchisee has received written permission from Franchisor to resume operations.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 11

From whom must an Ifly franchisee purchase the wind tunnel?

Accepted Answer

You must purchase your wind tunnel from SkyVenture, under the terms of the Equipment Purchase Agreement attached to this Disclosure Document as Exhibit C. The purchase price of the vertical wind tunnel equipment package (the "Purchase Price") varies depending on size and model chosen, as well as various options which can be included or excluded and ranges from approximately \$2,750,000 to \$5,000,000. The Purchase Price is paid in two installments: an initial down payment equal to 50% of the Purchase Price within 10 days of signing the Purchase Agreement and a final installment equal to the balance of the Purchase Price, in addition to the Systems Setup Fee (described below), when SkyVenture tenders the wind tunnel to you and before shipment or pickup. No part of the Purchase Price is refundable. There is an optional (but recommended) spare parts package which ranges in price from \$26,000 to \$366,000.

Source: Item 5 — Initial Fees (FDD pages 10–12)

Question 12

If the Ifly Buyer does not supply local staff members for commissioning, what can they request?

Accepted Answer

- Seller will provide onsite personnel to Start-up and Commission the Wind Tunnel.

During commissioning, Buyer will supply two local staff members for support and training.

- o If Buyer does not wish to supply local staff members, they can request the Seller to supply additional onsite support pursuant to the terms and conditions set forth in the attached Schedule 3 Rates Applicable to Additional Services at Buyer's Locations.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 13

If Ifly waives a breach of a provision, does that waive future breaches of the same provision?

Accepted Answer

The waiver of either party of a breach of any of the provisions of this Agreement by the other party must be in writing and signed by the waiving party, and shall not be construed as a waiver of any succeeding breach of the same or other provisions of this Agreement, nor shall any delay or omission on the part of either party to exercise or avail itself of any right, power or privilege that it has or may have hereunder, operate as a waiver of any such right, power or privilege.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 14

Who is the independent auditor for Ifly Franchising, LLC?

Accepted Answer

**Deloitte [& Touche LLP](https://franchimp.com)** 500 West Second Street

Suite 1600 Austin, TX 78701-4671

USA

Tel: +1 512 691 2330 www.deloitte.com

#### INDEPENDENT AUDITOR'S REPORT

The Member of iFLY Franchising, LLC

#### Opinion

We have audited the financial statements of iFLY Franchising, LLC (the "Company"), which comprise the balance sheets as of December 31, 2023 and December 25, 2022, and the related statements of income, changes in member's equity and cash flows for each of the three fiscal years in the period ended December 31, 2023, and the related notes to the financial statements (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 25, 2022, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 31, 2023 in accordance with accounting principles generally accepted in the United States of America.

#### Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

#### Emphasis of Matter

As discussed in Note 2 to the accompanying financial statements, the financial statements have been prepared from the separate records maintained by the Company and may not be indicative of the conditions that would have existed if the Company had been operated as an unaffiliated Company of iFLY Holdings, LLC. Our opinion is not modified with respect to this matter.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 15

Is the initial franchise fee for Ifly refundable?

Accepted Answer

You must pay us a lump sum initial franchise fee of \$25,000 when you sign the Franchise Agreement. The initial franchise fee is imposed uniformly on all franchisees and is not refundable.

Source: Item 5 — Initial Fees (FDD pages 10–12)

Question 16

When is a notice sent via electronic mail considered delivered to Ifly?

Accepted Answer

Any notice shall be deemed to have been given at the time of personal delivery or, in the case of expedited delivery service on the next business day, or, in the case of registered or certified mail three (3) business days after the date and time of mailing, or, in the case of electronic mail, upon transmission (provided confirmation is sent by expedited delivery service or registered or certified mail as provided above). Any change in the foregoing addresses shall be effected by giving fifteen (15) days written notice of such change to the other parties.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 17

What rights does the Ifly Franchisor have regarding the Control System Software?

Accepted Answer

ize of the Territory (including reduction to zero) or reconfigure the Territory; or
- 12.6.3. suspend, not renew, or terminate the Control System Software License and disable the Control System Software thereby rendering the Equipment inoperable; or
- 12.6.4. disable or terminate Franchisee's access to the Information Collection and Retrieval System.

Franchisor's exercise of any of its remedies under this Section 12.6. shall not constitute a waiver by Franchisor to exercise its option to terminate this Agreement at any time with respect to a subsequent event of breach of a similar or different nature. If Franchisor elects to exercise one or more of the additional remedies set forth above, Franchisee shall continue to operate in accordance with its rights and obligations hereunder, as so modified, and no such modification shall excuse Franchisee's performance of its obligations under this Agreement.

12.7. Post-Term Rights and Obligations. Upon the expiration or termination of this Agreement all rights and licenses granted herein shall terminate and Franchisee, its Affiliates and Owners, employees and agents, shall forthwith:
![](_page_100_Picture_0.jpeg)

- 12.7.1.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 18

What safety equipment must staff or patrons wear in the flight chamber and staging area of an Ifly franchise?

Accepted Answer

Franchisee shall only allow staff or patrons into the flight chamber and staging area if they are wearing helmets, shoes, goggles and hearing protection approved by Franchisor.
- 7.3. Minimum Safety Standards. Use of the Equipment shall remain under the Franchisee's exclusive direction and control. Franchisee shall not permit the Equipment to be used for any purpose other than that for which it was designed, nor allow it to be neglected or abused. Franchisee shall not make any alterations or additions to the Equipment without Franchisor's prior written consent. Franchisee will be responsible for assuring the careful and proper training in and use of the Equipment including, but not limited to, adherence to all of the training requirements and safety standards published by Franchisor and the supervision by Franchisee's properly trained personnel. Such safety standards represent only the minimum standards and Franchisee shall be responsible for monitoring and implementing any additional or more stringent safety standards that may be required at the Location. Franchisee shall provide such access controls, placards, lock-outs and cautions as may be required or advisable to insure the safe use and operation of the Equipment.

Source: Item 23 — Receipts (FDD pages 57–174)

Question 19

Can Ifly transfer or assign the Franchise Agreement without the franchisee's consent?

Accepted Answer

e deemed to be acting unreasonably.

#### ARTICLE 13

#### 13. TRANSFER RESTRICTIONS.

13.1. Transfer by Franchisor. Franchisor shall have the right to transfer or assign this Agreement and all or any part of its rights or obligations herein without Franchisee's consent to any person or legal entity that assumes Franchisor's obligations hereunder, and upon such transfer or assignment, the transferee or assignee shall be solely responsible for all Franchisor's obligations arising hereunder subsequent to the transfer or assignment. Without limitation of the foregoing, Franchisor may sell its assets to a third party; may offer its securities privately or publicly; may merge with or acquire other entities or persons, or may be acquired by another entity or person;

Source: Item 23 — Receipts (FDD pages 57–174)

Question 20

What years' balance sheets are included in the Ifly financial statements?

Accepted Answer

of iFLY Franchising, LLC

#### Opinion

We have audited the financial statements of iFLY Franchising, LLC (the "Company"), which comprise the balance sheets as of December 31, 2023 and December 25, 2022, and the related statements of income, changes in member's equity and cash flows for each of the three fiscal years in the period ended December 31, 2023, and the related notes to the financial statements (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 25, 2022, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 31, 2023 in accordance with accounting principles generally accepted in the United States of America.

#### Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report.

Source: Item 23 — Receipts (FDD pages 57–174)

Ifly 2024 FDD FAQ